Upstate, downstate distinction raises questions

Location, location, location. Those jocular words, the supposed keys to a successful business, never are more true than when state government divvies up the economic pie.

BY JEREMIAH HORRIGAN

Location, location, location.

Those jocular words, the supposed keys to a successful business, never are more true than when state government divvies up the economic pie.

Throughout his State of the State speech Wednesday, Gov. Andrew Cuomo repeatedly made million-dollar — if not — billion-dollar distinctions between two state locations whose boundaries seem sometimes to be arbitrary and shifting to say the least.

It's Upstate vs. Downstate. But it is more complicated than that.

Is downstate basically New York City?

It's where about 40 percent of the state's population resides. The city is governed by a mayor, presiding over about 8.3 million people.

Or is it the greater New York City metropolitan area? That encompasses Westchester, Rockland, Putnam and Long Island in most cases.

Most cases. Not all cases.

What about Orange County, or Dutchess? Or Sullivan and Ulster counties? They fall in the twilight zone of New York State geography, political and otherwise.

The definitions raises questions of its own, such as what you're trying to accomplish and who you are, whether you're an enormous state agency, a small private business, a government official or a taxpayer.

In the words of one government official, the upstate-downstate question is a complicated mess, but an important, unavoidable one.

Say you're the county manager of Sullivan County, as Jonathan Drapkin was in the mid-1990s.

"If I was trying to get grant money for tourism, we were in the Catskills Region. But if I had a question about roads, we were in Region Nine of the Department of Transportation ..." The latter has its headquarters in Binghamton.

Drapkin, who's now executive director of Pattern for Progress, a private non-profit regional planning agency. He said the state developed its various "parts" out of a need to deliver services and grant money to the plethora of state municipalities, agencies and programs those entities were charged with administering.

He says he gets it now, but it was never easy.

Knowing where to and how to apply for state assistance was one part of the equation. Since getting money or services from the state government was — and is — a competitive situation, the county always was fighting different battles on different fronts.

That's not to mention the regional designations imposed on the county by the federal government.

Was it fair that rural Sullivan County should be competing, as it sometimes was, for government grants in a region that included more urbanized counties? Drapkin said it didn't always seem that way.

Those battles for bucks, he said, "made it very difficult for us."

Harold King doesn't want to sound like a complainer. The executive vice president of the venerable Council of Industry was pleased with most of Cuomo's emphasis on restoring the state's manufacturing base and attracting new companies through reductions in corporate income taxes.

Here's where the upstate-downstate divide came most seriously into play for him: Cuomo's proposed 100 percent income tax elimination for manufacturers applies to Ulster and Sullivan counties, but stops at the Orange County line. Orange, as it happens, falls within the Metropolitan Transportation Agency's service area, and that's where the governor drew the line for his tax package.

So, in this instance, Orange County is downstate. Its neighbors Sullivan and Ulster are upstate.

"Here's the thing," King said following Cuomo's speech. "We're stuck between a rock and a hard place. I'm happy for the folks upstate."

"I'm not saying they shouldn't get this additional opportunity — the governor said it himself. It's vital for the economic health of the state. But I don't know why (the 100 percent tax exemption) stops at Orange."

He said he hopes the Legislature will see fit to extend the exemption to the entire state.

King may get his wish, if Al Samuels has anything to say about it.

Samuels is executive director of the Rockland Business Association and a member of the state's Regional Economic Development Council.

Even though he identifies himself as a "regionalist," he abhors the use of the downstate/upstate model.

"We're all one state," he said Friday. "Nobody south of Albany uses (the upstate-downstate argument) except defensively."

Limiting the tax exemption creates a competitive disadvantage for the county, not with other regions but with neighboring counties such as Ulster and Sullivan.

Samuels said that after Wednesday's speech, he met with Cuomo's senior staff and he now believes those staffers soon will be "working on another way of looking at things."

Orange County's new executive Steve Neuhaus intends to push the process of dumping the MTA tax along as quickly as possible.

As vice president of the Orange County Association of Towns, Villages and Cities, Neuhaus got almost every municipality to pass a resolution against the tax and then support Nassau County's attempts to overturn it in court.

When the MTA held an unrelated hearing in Newburgh, he got what he promised would be "a pitchfork-and-torches kind of crowd" to attend and voice their displeasure. The prospect so unnerved the MTA that it brought its police force along to check the public at the door.

The tax, however, still raises about $1.2 billion a year toward the MTA's $13.5 billion budget — an amount it would be hard-pressed to do without and an amount Cuomo would be hard-pressed to replace.

In fact, the MTA's chief financial officer has said elimination of the tax in the suburban counties would cost it $300 million a year.

Neuhaus pointed out that Cuomo and legislators face re-election and the payroll tax could become a potent bargaining chip. "I'm convinced the quickest, easiest way to stimulate economic development is to eliminate the (MTA) tax."

jhorrigan@th-record.co

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